Susan Allen: How Lenders Can Capture More HELOC Business


PERSON OF THE WEEK: From home renovations to debt consolidation, savvy consumers know how to use HELOCs to their advantage – which is why, even in this higher-rate environment, HELOCs continue to represent a growth opportunity for mortgage lenders that offer them.

But how can lenders drive even stronger growth with their HELOC offerings? To find out, MortgageOrb recently interviewed Susan Allen, head of product for Experian Mortgage.

Q: What should mortgage lenders be doing now to grow and protect their businesses in the future?

Allen: We see a strong push from lenders to expand both product offerings and their overall footprint to drive growth. Tapping into new product offerings outside of 30-year fixed rate mortgages can help lenders reach new customers and also broaden their relationship with current borrowers and the types of services they can offer them.

There are so many options from HELOC to personal loans, that the options can seem overwhelming. Mortgage lenders who are successful with product and footprint expansion tend to leverage targeted data and analytics to set their strategy and drive their success.

Q: What should lenders be considering when it comes to home equity loan growth strategies?

Allen: Even with home prices softening, HELOCs are still very attractive for borrowers. There is also strong competition for these borrowers. Lenders who are successful know their prospects well and create targeted messaging. For example, a prospect that could benefit from a HELOC for debt consolidation purposes has a very different profile than a prospect that may leverage a HELOC for a home renovation project. While a HELOC could be an appropriate credit product for both prospects, each will require unique and tailored messaging.

It’s crucial for lenders to have access to these types of insights that will help them make the most informed decisions to extend credit. This includes consumer credit behavior and how it’s trending over time, income and financial standing, insight into the property, and understanding the amount of equity.  

Q: How can lenders leverage data to reach and better serve potential customers? 

Allen: One way to better reach customers is by incorporating income and employment data into the credit decisioning process. Leveraging income and employment data gives lenders a more complete picture of a potential borrower’s financial situation before offering a loan and setting terms. 

Income and employment data are also important for ensuring a seamless and efficient verification process. Verification processes of the past were complex, tedious and risked negatively impacting the customer. Leveraging a solution that verifies a customer’s income and employment in real-time not only improves the borrower experience, but saves the lender time, money and resources. 

Q: How can lenders ensure they are reaching the right audience?

Allen: Audience segmentation and multi-channel marketing allow lenders to reach the right borrowers with tailored offers in the right channels. As mentioned earlier, leveraging data can provide critical insights to help find the right customers. For example, lenders can use a combination of credit and property data to learn more about a potential borrower’s full financial picture to more easily identify which mortgage product is a best fit for the potential borrower and what kind of message will resonate with them. 

However, honing in on the right audience is just the first step. Lenders also need to make sure they are properly identifying new customers based on how they would look for a new mortgage product. This means lenders need to consider if a mortgage applicant would be more likely to make a decision based on certain factors, such as being loyal to a brand or if the customer is a heavy researcher that considers all available options.  

Finally, lenders not only need to reach consumers on their preferred channel, but it’s a best practice to also leverage an omni-channel strategy that reaches potential borrowers across multiple channels, platforms and devices. For example, we increasingly see lenders using emails in prescreen campaigns, along with invitations across multiple channels, such as the lender’s website or mobile channels, to apply. 

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